There's a new 3rd-largest oil importer in the world

Jared Wiltshire/Wikimedia Commons India is now the world's third largest importer of crude oil after the United States and China.

The country's oil imports have steadily climbed along with its growing economy. India has surpassed Japan in terms of oil imports multiple times over the past few years, and could trade spots again. But while they duel it out in the short-term, the outlook is clear. India's import dependence is rising fast and it will be one of the largest sources of demand growth for the foreseeable future.

The International Energy Agency predicts that India will burn through 4.1 million barrels per day (mb/d) in the second quarter of this year, edging out Japan's 3.8 mb/d.

India's growing appetite for crude will have a variety of implications.

India could provide a huge source of demand growth, with its additional demand for 2015 (perhaps as much as 300,000 barrels per day) potentially surpassing China's (295,000 barrels per day). China, for so many years, has been the driver of oil markets. Now, however, China is starting to show signs of more modest GDP growth, and a slowing appetite for crude. If India becomes one of the most important sources of demand growth, exporters will likely focus their operations there.

India offers a fast growing market for Middle East oil. Iran's oil production jumped by 90,000 barrels per day in April - the highest level in three years - because India imported more. Saudi Arabia is also trying to grab a slice of the growing Indian market.

Bloomberg reported that Saudi Arabia is looking at providing its own tanker fleet, which would reduce costs. As a result, it could pass on the savings through a price reduction of 25 to 30 cents per barrel, which would make Saudi oil much more attractive for Indian refiners. The discounts reflect both Saudi Arabia's desire to hold onto market share, especially in a fast growing market, but also a recognition of India's significance as an oil importer.

Saudi Arabia's executive director for marketing visited New Delhi this month, presumably to discuss the growing oil relationship between the two countries. Saudi Arabia exported 795,000 barrels per day to India from January through April 2015, a gain of about 4.6 percent over the same period in 2014.